Despite the Recovery, Mortgage Originations Fell 6.2 Percent in Q1

Despite the housing recovery and home sales running 10.3 percent above the level of a year ago, mortgage originations are falling, signaling weakening refinancings.

Residential lenders originated 6.2% less during the first three months of 2013 than in the final three months of 2012, according to Mortgage Daily's First-Quarter 2013 Mortgage Lender Ranking . Estimated first-quarter originations by all U.S. lenders worked out to approximately $505 billion.

Though originations were off from the fourth quarter, several players still managed to increase business. Although the three-biggest mortgage servicers reduced their servicing portfolios, a trio of rising stars each added more than $100 billion to their portfolios. The second-quarter forecast calls for stronger production. Wells Fargo maintained its dominance as an originator, though its market share slipped.

Based on the Mortgage Market Index from LoanSifter and Mortgage Daily, second-quarter business is poised to increase 13 percent over the first quarter. Overall mortgage business improved 13.8 percent from the first-quarter 2012.

The biggest decline among originators was at Ally Financial, where production tumbled 38 percent from the fourth-quarter 2012. Provident Funding saw a 28 percent decline, and PrimeLending fell 24 percent. The best improvement was Stonegate Mortgage's 36 percent increase. Bank of America and SunTrust Mortgage each boosted business by 11 percent.

Biggest Q1 Originators

Rank

Lender

Market

Share

1.

Wells Fargo

22%

2.

Chase

11%

3.

Quicken

5%

4.

Bank of America

5%

5.

U.S. Bank

4%

Wells Fargo, BofA and Chase maintained their respective No. 1, No. 2 and No. 3 positions among the country's biggest servicers of home loans -- though each reduced their servicing portfolios from year-end 2012.

But portfolios expanded by more than $100 billion each at No. 4 Ocwen, No. 6 Nationstar and No. 8 Walter Mortgage. All three firms are poised to capitalize on refinancing a share of their massive portfolios.